Sprint acquires controlling stake in Clearwire

$100 million deal bumps Sprint's stake in Clearwire from 48.1 to 50.3 percent.

Just on the heels of Sprint’s acquisition by the Japanese powerhouse SoftBank, the beleaguered American cell phone company has now gained a majority stake in Clearwire.

Sprint will pay Clearwire’s founder, Craig McGaw, and his holding company, $100 million to raise its stake from 48.1 to 50.3 percent. This move is squarely aimed at gaining access to more of Clearwire’s juicy LTE spectrum.

America’s number three carrier is already Clearwire’s biggest customer—but Clearwire has struggled financially, particularly given its early bet on WiMAX, which didn’t pan out.

Clearwire’s stock has jumped within the last week, going from $1.30 per share to a high of $2.88 earlier this week—the stock has since fallen to closer to $2 per share.

Some investors may themselves be looking for a tidy exit, and are likely hoping that Sprint will simply acquire the entire company now that its fortunes are intertwined with the well-heeled SoftBank.

"[Thursday's proposal] does further inexorably tie the future of Clearwire to a more well-funded Sprint," Stifel Nicolaus analyst Christopher King told the Los Angeles Times.

Clearwire has tremendous spectrum assets - about 120MHz of 2.6GHz spectrum in most major metro areas. It really comes down to how much does Sprint need to light up and when. They're going to start with two 20MHz channels of TD-LTE next year, twice what Verizon and AT&T currently offer, and 4x what Sprint offers. Its going to be focused in dense urban cores where the networks are maxed out, and need the relief. When LTE-Advanced rolls out in 2014, they can bond multiple channels all the way up to 100MHz (though the current practical limitation is 40MHz). 100MHz of spectrum would yield end-user speeds of around 100Mb/s (with aggregate cell throughput speeds around 1Gb/s).

As a Clear customer, all I can say is that, for being a technology company, Clear doesn't have a clue. Instead of growing at a manageable rate and keeping all of their customers happy, they dumped huge money into marketing, grew faster than they could control and pissed off everyone.

I'm a pay as you go customer. I paid for the hardware and should just be able to log onto my account and re-up for the period that I want to use the service. Shouldn't require any human intervention outside of my own. But no, instead, I have to speak to atleast 2 people on the phone just to pay $10 for a day pass. If I sign-up for a month, I can't just get one month, I have to sign-up for a recurring service. And if I want to cancel, I have to call and talk to 2-3 people to do that.

Are we witnessing the beginning of the end of the ATT/Verizon duopoly?

I sure hope so.

Sadly no, judging by today's Verizon quarterly numbers. They're number one and not going anywhere anytime soon. They've got the most coverage, the most spectrum for the future (sans clearwire), the most customers, and the highest prices. You'd need some major disruption in the industry to unseat them. AT&T will continue to be second fiddle. T-Mo and Sprint will fight it out for third place.

I'm not so certain regulators are going to like letting a foreign company have [U.S.] spectrum from one carrier let alone two. I'm only going to give this acquisition a 50/50 chance to go through, and that's being generous given the financial state of the two carriers.

Im so confused as to why Sprint would even want Clearwire? They use their WiMax for their 4G, which theyre fazing out anyway in favor of LTE. So whats the benefit? I doubt they want to be an ISP and compete with the cable companies as well?

Im so confused as to why Sprint would even want Clearwire? They use their WiMax for their 4G, which theyre fazing out anyway in favor of LTE. So whats the benefit? I doubt they want to be an ISP and compete with the cable companies as well?

Im so confused as to why Sprint would even want Clearwire? They use their WiMax for their 4G, which theyre fazing out anyway in favor of LTE. So whats the benefit? I doubt they want to be an ISP and compete with the cable companies as well?

In a word: bandwidth. If they merge with Clearwire, they can sell off or close the ISP portion, keep the LTE spectrum and related hardware, and fold it into their own plans for 4G-LTE rollout.

Aw, well there goes my hopes for better DJs and music. Too bad the pirate radios around here aren't blasting explicit music anymore since their repeaters got discovered.

Aside from the brand confusion because both CLEAR companies cover broadcasting in the light spectrum, what implications does this have on current competitors who use their towers? Service rate increases?

I'm not so certain regulators are going to like letting a foreign company have [U.S.] spectrum from one carrier let alone two. I'm only going to give this acquisition a 50/50 chance to go through, and that's being generous given the financial state of the two carriers.

Oh, it's not just that, SoftBank is counterbidding for MetroPCS as well. In fact, after buying Sprint, they may be looking to roll T-Mobile, too. If they outbid them on MetroPCS, T-mo is screwed. And thanks to the last regulatory circlejerk, it's unlikely that AT&T would try to pick them up again.

So yeah. Tri-opoly? And one's going to be run by a foreign company, who will outsource everything that doesn't require a hands-on, and will be taking its profit out of the US. That sounds like a win for the American consumer.